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Futures Movers: OPEC + cancels manufacturing talks once more on Monday, inflicting crude oil costs to rise

Oil prices rose on Monday, driven after the OPEC + group of producers again canceled talks on production levels, its third attempt to break a blockade on production growth and the oil market faced tight summer supplies and soaring prices, Reuters. Bloomberg and the Wall Street Journal reported.

Oil prices rose to new multi-year highs after the OPEC meeting was canceled. Brent
BRN00,
+ 0.41%
rose 32 cents, or 0.4%, to $ 77.48 a barrel on Monday evening, trading 2-1 / 2 year highs. The US benchmark, West Texas Intermediate Crude Oil
CL00,
+ 1.98%
rose $ 1.50, or 2%, to $ 76.65 a barrel. Skinny trading on a U.S. Independence Day holiday adds volatility, analysts said.

OPEC + ministers cut talks on Monday and did not set a new date for their resumption after disagreeing last week when the United Arab Emirates rejected a proposed eight-month extension of production restrictions, Reuters reported.

OPEC and its allies, a group known as OPEC +, agreed on record production cuts of about 9.7 million barrels per day in 2020, equivalent to about 10% of global demand in 2019, to help tackle a drop in prices resulting from the global. resulted in economic recession during the COVID pandemic.

The coalition of 23 nations decided to bring about 2 million barrels a day to market from May to July this year to ease production restrictions once demand recovered. On Friday, most of the delegates reached an agreement to gradually reduce the remaining production of about 5.8 million barrels per day by increasing production by 400,000 barrels per day from August to December 2021, and also planned to extend the pact of incremental production increases up to To extend in late 2022 but the proposal has been blocked by the UAE, the Wall Street Journal reported.

See also: What's next for oil prices as OPEC + deadlocks?

At the last minute, the UAE said they would only accept the proposal if they were given the same conditions for calculating their quota as the Saudis. It is haggling over a difference of around 600,000 barrels per day and wants to adjust its so-called baseline rate to 3.8 million barrels per day from the current allocation of 3.2 million barrels per day. The UAE consistently said they would accept the increase in production without the contract renewal, but the Saudis argued that the two must go together.

In recent months, accelerating vaccination campaigns in the US and Europe have spurred global economic activity. The cartel's own data shows that oil stocks have fallen back to average levels as fuel consumption has recovered. According to Bloomberg, demand in the second half of 2021 will be 5 million barrels per day higher than the OPEC forecast in the first half of the year.

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